With the Fed once again pausing its rate hike scheme that has dominated market narratives this year, investors and advisors can take stock. Should the Fed actually be done with rate hikes and merely be focused on convincing markets, the “higher for longer” regime may have begun. While yes, that means higher debt service costs across the economy, it also invites further excitement about future rate “cuts” and, crucially, predictability. That could even open up a route for investors to return to disruptive tech.
The Disruptive Tech Landscape
Yes, disruptive tech has fallen off notably from its lockdown-era highs and post-GFC low interest rate feeding frenzy. However, could it be that disruptive tech has digested those rate hikes already and perhaps even already bottomed out?
The ALPS Disruptive Technologies ETF (DTEC), for example, has spent much of the last few months hovering around an “oversold” signal per its relative strength indicator (RSI) on YCharts. That changed in October, however, with the ETF also seeing its price rebound and steadily rise as of November.
So where does that leave the disruptive tech investing landscape overall? Depending on how one defines “disruptive,” markets actually did see a big jump in disruption via, of course, artificial intelligence. AI swooped into earnings calls in the first quarter and raised morale at a crucial moment among analysts reviewing the biggest tech firms. The promise of AI disrupting sectors from agriculture to media offered a big boost, and with AI showing no signs of slowing, disruptive technology investing could still appeal.
DTEC represents one intriguing option for exposure to the space. The ETF has returned 6.1% over the last week per VettaFi on top of a durable 5.2% return YTD. DTEC tracks the Indxx Disruptive Technologies Index for a 50 basis point (bps) fee. For those investors looking at the tech space again, DTEC may be one option to consider moving forward.